[player24]

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The standard argument against pharma right now is that the pipelines are empty. Does PFE have anything big coming out? Any reason to expect strong earnings growth in the next 3-5 years?

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Pharmaceutical companies are exposued to competition from generics on drugs with expired patents. One of the games they play to get around this risk is to reformulate the drug in some way, thus creating a new drub with a fresh patent.

One of Pfizer's major drugs, Lipitor, will lose its patent in 2006 (I believe). The company has developed a new pill which blends Lipitor with torcetrapib. One risk (and opportunity) associated with PFE relates to their ability to convert Lipitor patients to the Lipitor/torcetrapib pill. PFE's pipeline valuation is heavily dependent on the success of this conversion (most non-converted patients will end up using a generic Lipitor substitute). I think the Street is looking for a 70% conversion rate by 2007, any shortfall would likely impair the stock.

Incidentally, I have had physicians try to prescribe for me combination drugs which have bells-and-whistles that the generic alternative does not have. If you are a smart patient/consumer, you will be aware of when this happens and you will decide for yourself as to wether the bells-and-whistles have benefits which are worth the added costs.